Tata expands, Ambani cuts, Birla demerges: The high-stakes strategies reshaping India’s retail war

Leading conglomerates in India—Reliance Industries, Tata and Aditya Birla—are busy recasting their operating model in retail with a focus on identity, longevity and returns to cash in on the emerging opportunities in the sector. However, the business houses rely on contrasting strategies to position their business strong in the market.

Noel Tata-controlled Trent Ltd walks bold, aggressively adding stores in fashion and lifestyle and grocery businesses, while Mukesh Ambani’s Reliance Retail shuts down the loss-making stores as part of streamlining its operation. Kumar Mangalam Birla’s Aditya Birla Fashion and Retail Ltd (ABFRL) has strategically rationalised their stores, moreover, demerged the company into two separate entities. (ABFRL) has strategically rationalised their stores, moreover, demerged the company into two separate entities.

The Indian retail market is expected to reach over ₹190 lakh crore by 2034 from ₹82 lakh crore in 2024, said Boston Consulting Group (BCG) and the Retailers Association of India (RAI) in their recent report. The retailers capable of embracing the diverse demographics and contrasting consumer behaviours stand to gain the most. They will need to meet the unique needs of each consumer group within every city, said the report.

In FY25, Reliance Retail rationalised its store network, closing 2,155 stores and opening 2,659 new ones, resulting in a net addition of approximately 500 stores. The rationalisation, along with business streamlining, led to a 20 basis-point increase in EBITDA margin, reaching 9%. The company focused on operational efficiencies and profitability, even as it continued to expand its store footprint.

Leading retailers curbed new store openings in 2024 due to tepid consumer demand, particularly in discretionary categories like apparel and footwear. ABFRL remained susceptible to economic downturns owing to the discretionary nature of its products, said Crisil Ratings in its recent report. In a cautious spending scenario, discretionary segments such as gems and jewellery, and apparel are impacted the most while non-discretionary segments such as food and grocery, and pharmacy impacted less.

Aditya Birla Fashion and Lifestyle Ltd (ABFRL) and its demerged entity Aditya Birla Lifestyle Brands Ltd (ABLBL) are shutting down loss-making exclusive brand outlets (EBOs), right-sizing the network according to the profitability and inventory. It is also resetting the online channel for profitable growth. The combined entity raised around ₹4,239 crore through preferential issue and QIP route in January 2025 to reduce liabilities.

ABLBL plans to expand its store network size to 4,500 from 3,300 in the next five years. As of December 2024, the combined entity operated on a retail area of 11.9 million square feet with around 4,080 brand outlets, 38,206 multi-brand outlets, and 412 Pantaloons stores.

Trent, headed by Noel Tata as chairman, wants to build on their presence in metro/ Tier 1 cities. The company has been giving emphasis to Tier 2 and 3 lately, thanks to the vibrant trend quotient in smaller cities. Noel Tata said in the Q4 earnings release, building density of presence in key markets will improve the proximity and ability to service customers.

Trent operates a portfolio of 1043 ‘large-box’ fashion stores. The strategy is to selectively refresh the store footprint across concepts. It has portfolio of 248 Westside stores, 765 Zudio stores (including 2 in the UAE) and 30 stores across other lifestyle concepts, across 242 cities. In FY25, it opened 40 Westside and 244 Zudio stores and added presence across 64 cities/towns including many in Tier 2 and Tier 3 locations.

Tata said, "Our fashion portfolio continues to be differentiated by disciplines and choices. In FY25, Zudio revenues exceeded a billion dollars… The Indian consumer has evolved rapidly in the recent years and is seeking an aspirational product proposition, attractive pricing and importantly ready accessibility. We believe building density of our presence in key markets allows us proximity and the ability to service our customers readily.”

The Star grocery business of Trent, consists of 78 stores including the addition of 12 stores in FY25 and witnessed an all-round improved operating performance, driven by in-house brands, staples, fresh and the general merchandise offerings. The business registered an operating revenue growth of 17% in Q4FY25.

Reliance’s fashion business is now focused improving its offerings. “We are now doing weekly refreshes in the store, so every time a customer walks in, they get a certain percentage of options which are new. Also, we have kind of optimised the number of options which are available so the stores are less crowded and they look much more attractive,” said Dinesh Taluja, CFO, Corporate Development, Reliance Retail during the Q4 earnings call.  

Isha Ambani, director, Reliance Retail, recently said that the retailer is dedicated to pioneering Bharat-centric innovation. “We are leveraging cutting-edge technologies, including AI-driven solutions, to tailor customer experiences to the unique needs and preferences of the Indian consumer,” she said.